Important Coverages to look for on your Homeowner's policy

[Soaringagent]

Those are great tips for building up household density. Yep, retention definately increase with more products per house hold.

 

[coccoc]

The Nationwide policy is one of the more robust policies written in TX. As for the auto, we are a little high but with the accident forgiveness, life-time guarantee on repairs and most claims being handled within 24 hours... we're talking value, not price...right.

 

[LaPal]

I am sure that alot of people, myself included are not aware of the differant insurnace covers that are availalble. So your post was very informative!!

 

[PLagent]

Many people go years without ever knowing what is covered on their home insurance policies because they never look past the primary coverage ammounts listed on their dec. pages - that's why I made this list for everyone. Below, I have compiled a list of important coverags to look for on your homeowner's policies - please be sure to compare them with what is currently covered on your policy in order to avoid any headaches later on down the road.

Replacement Cost Coverage on Contents: Pays for the replacement value, as opposed to the actual cash value (replacement minus depreciation) of your contents.
Example: Your $30,000 couch has been damaged by a covered loss. Without replacement cost coverage, your company will pay you the current cash value of that couch, which may be $15,000, as opposed to the cost to replace the couch, which may now cost well over $30,000.

All Risk Peril on Contents: As opposed to "Named Peril", "All Risk" coverage, covers your property for all possible losses unless they are specifically excluded within your policy. Some examples of common losses only covered with the enhanced "all risk" coverage are: 1) Unforeseen accidents like spilling of wine or paint onto your rug or couch 2) Broken furniture during a move 3) Damage other than mold, caused by temperature or dampness (due to rain, sleet or snow), 4) Mysterious disappearance (due to the loss or misplacement of an item), and many more. In insurance terms, a named peril policy is referred to as an HO-3 and an all risk is referred to as an HO-5.

True Replacement Cost on your Dwelling: The cost to replace your home has been estimated at (example: $500,000). An unfortunate loss has destroyed your home, which now needs to be replaced. After a review by the loss adjuster, your home is calculated at $800,000 to replace. Almost all companies have "replacement caps" which allow an additional specified percentage (usually 25%) of additional coverage to be added to your dwelling amount to compensate for an underinsured value. With this "cap", you are now entitled to an extra 25% (of your dwelling's replacement value), giving you a total of $625,000 to rebuild your home, with the difference being paid out of pocket. To protect yourself against this, be sure to ask for a high replacement cap (such as 50%) or a "non cap" replacement policy, offered through select companies such as Chubb, AIG or Fireman's Fund, which will agree to pay whatever it costs to rebuild your house.

Off Premises Theft: Covers your personal property for any theft loss that may take place away from your primary location.
Example: Your luggage is stolen while on vacation, or your vehicle gets broken into while it's parked at work and you realize that your laptop and golf clubs have been stolen. Without having the OPT endorsement on your policy, in scenarios such as this you will not be able to collect any reimbursement for any of your stolen property.

Windstorm Deductible: Many policies today include automatic windstorm deductibles (usually 2.5% to 5% of your dwelling amount) that are applied to claims for wind/hurricane losses. This means that the owner of a $500,000 house could pay a deductible anywhere from $12,500 to $25,000 in the event of a wind loss damaging their dwelling. In order to ensure that you don't have this "hidden" within your policy, be sure to ask your agent or read through your policy declarations.

Identity Theft/Fraud Coverage: Pretty self explanatory! Identity theft is among the most commonly committed crimes in the U.S and it can quickly become a very costly problem to fix, often times leading into the tens or hundreds of thousands depending on the complexity. Make sure your policy covers you against ID theft/ID fraud so that you are well protected.

Water Backup: While flood is normally excluded from a homeowner's policy, you can opt to add (via an endorsement) water backup coverage which would cover your property for any damages that may stem from the result of water backing up from an outside source (such as a sewer) and entering your house via any drainage outlet that may be located in your basement or attached garage, etc..
Example: You have a drainage pipe running from your basement to the sewer line outside and the sewers get backed up as a result of being clogged with excess leaves which causes water to enter your house from the inside. Any property that is damaged from that resulting water, would be covered up to the policy coverage amount indicated for water backup. Please note that, by definition, any water that had entered your house from the outside is considered a flood loss.

Oil tank coverage: A very often overlooked coverage, but also extremely important. A leaking underground oil tank can result in losses in excess of $100,000 (and that's not uncommon), due to the cost of cleanup, decontamination, soil replacement, etc…Today, luckily most homes are not built with underground oil tanks, but should you have an older home and you are aware that your tank is buried beneath the ground, it is definitely in your best interest to have a pressure test completed in order to ensure that the tank is in good shape and to locate a carrier that will cover oil tank leakage. While there are only a VERY few selected carriers offer this coverage, the premiums for these higher end companies are usually considerably more expensive, but again, when considering what a loss could cost you, it may be feasible to pay the extra premium in the end. Please inquire with your carrier of their terms and conditions when it comes to covering oil tank leakage as coverage can vary.

I hope this helps! Should anyone have any additional questions, feel free to post them – I'll check up periodically.



*** Please note that the above guide is to be used only as a type of glossary of coverage terms in relation to homeowner's insurance policies. In no way am I advising what to purchase or what not to purchase. It's sole intention is to educate the general population of commonly overlooked coverages among policies today. Please note that these are general definitions and may vary slightly from state to state. It is highly recommended that you further inquire, with your current agent, about the above coverages, in order to help you figure out what is and what is not included within your policy and to help you figure out which coverages are right for you. ***

Nice list- thanks for making it!

I'd also recommend "ordinance & law" coverage- especially for the older homes!

 

[mka]

As to Salpro22 question - wouldn't you guys / gals recommend a good solid UMBRELLA policy if you have multi properties ? I had a huge Umbrella for maybe $300/$400 a year back when I was in my landlord days (NEVER AGAIN!!! lol...)

Umbrella will cover liability only, building itself is not covered under umbrella. so its very important to buy a DP or HO policy.

 

[JasonH]

The Nationwide policy is one of the more robust policies written in TX. As for the auto, we are a little high but with the accident forgiveness, life-time guarantee on repairs and most claims being handled within 24 hours... we're talking value, not price...right.

To me because nationwide is so much more expensive and they offer accident forgiveness day one its like you are paying for the accident you haven't had yet.

 

[Jerbond]

Before I was an agent, I had AAA. I switched to ALLIED (Nationwide) Increased my limits form 25/50 to 100/300 and saved $1,000 a year in California. I also rescently added my girlfriend to my policy- added her car, and her as an added driver. She had an accident last week (not her fault) and I found out that my underwriter had the endorsement on hold because of mileage verification. Technically this car had no insurance because it was after the 30 days of purchase (automatic coverage). Allied endoresed the vehicle and driver, and I should have a check in the next couple of days. Now, maybe if the accident was her fault, they may not have covered this, but in my eyes, I would say that they did a hell of a job protecting me! So the $2,800 I spend per year for (2) autos, a travel trailer and my home is well worth it. On a side note, sure you can get auto insurance for $15 a month. But you can also get a ton of paper (newspaper) for $.25! You do get what you pay for in insurance....

 

[charms]

I got my Group 1 license a while back and have been reading posts on here for a while & think this is a great site!

Looking for a little advise and help for my personal home & auto policies. I'm in the Fort Worth area and have had State Farm since '05 and the rates are skyrocketing. I've heard great things about Kemper and their peril clause. Is there anybody here that can give me quotes on Kemper or any other similar policies?

I need to move quick on this since I have my insurance escrowed with mtg, my mtg company will be sending State Farm a check in mid-December unless I switch, then I'll have to come up with cash to get a new policy and wait for refund from State Farm and that's not an option I want.

Never have posted here so I'm not sure if my email address will appear or what, so my email is [email protected] ----- Thanks!!

 

[Guest]

Before I was an agent, I had AAA. I switched to ALLIED (Nationwide) Increased my limits form 25/50 to 100/300 and saved $1,000 a year in California.

I have AAA (used to be called CSAA) for the past 10 years on our 2 cars and home in Northern CA. Each year I ask a friend whom I share leads/prospects with (he does not do L/H nor I P/C) to quote me and he has never been able to save me more than $150 a year and it is usually from some company I never heard of.

Here a Google street-view of our house. (It's very cool how you can "walk" around a neighborhood and see it as if you were there.)

Al

 

[djs]

AAA can be high or low, depending on a lot of factors. They tend to go after preferred business, and give good loyalty discounts.

Sometimes I beat the pants off of them, sometimes I can't touch their rates. It all depends.

The biggest problem with AAA is their alter ego, Western United. If you have never heard of Western United, you are in good shape. If you have, you know that is where they put the higher risks and the rates are astronomical.

Dan